Vbare Has Accumulated Investments of €34.2M Since its Stock Market Debut

5 February 2019 – Eje Prime

Vbare is continuing its commitment to Spain. In 2018, the company invested €15 million in the purchase of residential properties. In January 2019 alone, the Socimi spent another €5.5 million on the purchase of number 94 Calle Vallehermoso, taking the firm’s total investment since 2016, the year it made its stock market debut, to €34.2 million.

The company’s most talked about acquisitions include the purchase of a building comprising 27 homes and 2 commercial premises in Madrid for €5.2 million. That was its second largest investment to date, after its purchase in October of another property on Calle Luchana for €10.5 million.

The trend demonstrates Vbare’s commitment to prime assets. The Socimi has purchased 29 properties in 2019 compared with the 52 that it bought in 2015. Nevertheless, the price of those investments is 41.03% higher. In other words, the cost per property has risen from €75,000 per unit to almost €190,000.

Nevertheless, and despite the investments undertaken in 2018, the group reduced its net result during the first nine months of last year. Its profit amounted to €1.84 million, down by 15.6% compared with the same period in 2017, according to a statement issued by the company to the Alternative Investment Market (MAB).

For this reason, the company now intends to increase its influence in Madrid, in terms of both square metres, as well as the number of units that it owns. In general terms, the group also plans to increase the occupancy rate of its buildings from 83% to 90%.

Original story: Eje Prime (by Marta Casado Pla)

Translation: Carmel Drake

M&G Invests €80M to Strengthen its RE Portfolio

29 May 2018 – Expansión

The real estate division of the London-based firm M&G Investment has decided to bet significantly on the Iberian market, where its exposure now exceeds €500 million. “We are partners of institutional investors looking for core properties in the best locations across Europe. We opened our office in Spain in 2016, but we completed our first operations there a year earlier”, explains Federico Bros, Director of Asset Management for Spain and Portugal.

Its first operation involved the purchase of the former headquarters of Telefónica located on Calle Ríos Rosas (Madrid) and leased to the advertising giant WPP. “It is an example of what we look for, well-located assets with long-term contracts, 17 years in this case. Between the renovation and purchase we will invest €175 million in that property”, says Bros.

After that acquisition came others, such as an office building in Barcelona’s 22@ district and, recently, five operations with a very diverse profile. On the one hand, M&G purchased three commercial assets: two in Madrid and one in Granada. “The premise in Granada, measuring 2,500 m2, is located on Reyes Católicos, the best shopping street in the city”, explains Bros. In the case of Madrid, M&G acquired two retail premises on Gran Vía 68. “We closed this operation in May but we have been negotiating it for months, given that the building was being renovated. A few months ago, a large Tony Roma’s restaurant opened there and Sabadell is going to open its flagship branch in the other premise in a matter of days”, he said.

Similarly, the firm acquired two industrial assets in Madrid, specifically a logistics platform, leased to Teka, in the Corredor del Henares, and another complex in Getafe. Those two sites span more than 55,000 m2. In total, the firm has invested €80 million on its latest operations, channelled through two funds: MEP and EuroSPIF.

More opportunities

Following these investments, the manager is still looking for opportunities in the Spanish market.

“We are involved in several processes, both official and off-market, in Madrid, Barcelona and prime locations in other cities. Spain is a priority country for us”, says Bros.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

German Logistics Giant Hansainvest Set to Invest €300M in Southern Europe

29 May 2018 – Eje Prime

The logistics business is looking to Spain to grow. The giant Hansainvest is preparing to carry out an offensive in the logistics sector in Europe and is planning an investment of between €200 million and €300 million in the logistics sector in markets such as Spain, the UK, Germany and France, according to explanations provided by the company. Its interest in Spain would represent the group’s entry into the country.

The group, which has just appointed Philipp Middendorp to lead the group’s logistics business, is going to start a new round of logistics assets purchases between now and the end of 2019 as part of its growth strategy. In addition to Southern Europe, the company is also going to focus on the Nordic countries and Poland.

According to the company, its wish list includes acquiring core and core plus properties, although “it will also look at possible alternative uses of properties”, explain sources at Hansainvest. “We intend to mainly buy traditional logistics assets, but we will also focus on the acquisition of projects under development”, they add.

“There is a great deal of demand for logistics assets from players in the domestic and international markets. The only way to keep making attractive investments in this context is to broaden our market approach”, they say.

The German logistics group’s asset portfolio comprises residential properties, as well as office buildings. The company also has buildings such as hotels, retail spaces and logistics assets, which is a business that it has decided to develop more over the coming months. In total, Hansainvest manages an asset portfolio worth more than €4.3 billion in 18 countries.

Lack of supply

Hansainvest is going to have to undertake a detailed study of the Spanish market and not let escape any opportunities that arise, given that one of the problems facing this business in the Spanish market is the lack of supply. This means that overall investment in the sector is going to fall by 20% in 2018, although it will still exceed €1 billion, according to a report from the real estate consultancy CBRE.

Leasing is also going to be a problem this year. In Madrid and Barcelona alone, absorption is going to decrease from more than 1.5 million m2 recorded last year to just over 1.2 million m2 this year.

The product shortage is going to lead to the generation of new, but insufficient supply in the two major capitals in 2018. In Madrid, 500,000 m2 of new space ix expected to come onto the market this year, compared with 342,000 m2 in Barcelona.

Nevertheless, cities on the rise in recent years in the logistics market such as Zaragoza, Sevilla and Valencia have minimal supply (…).

Rents on the rise

Of course, the high demand, limited supply and poor outlook for new developments are inevitably leading to an increase in rental prices. That is what happened in 2017, with growth of 5% in Madrid and Barcelona, and in 2018, prices may rise by even more. CBRE’s report points to increases of approximately 7% in the cost of prime assets in Madrid, where prices will reach an average of €5.60/m2/month.

In Barcelona, one of the most expensive cities in Europe in terms of logistics rents, the rental of high-quality warehouses could cost as much as €6.75/m2/month this year, up by 4% compared to 2017.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

IBA Capital Creates a Fund to Invest up to €300M in Spain’s High Street

25 May 2018 – Eje Prime

IBA Capital is gaining strength as one of the investment funds with the most potential in the Spanish market. The company has just launched an investment fund specialising in the retail high street segment, through which it plans to invest up to €300 million in the purchase of commercial assets located on the main streets (high streets) of Spain’s secondary cities, according to Thierry Julienne, founder of the investment vehicle, speaking to Eje Prime.

This new vehicle from IBA Capital will bet on buying commercial premises on streets such as Calle Larios in Málaga and Calle Tetuán in Sevilla, for example. Also on IBA Capital’s radar are assets located in cities such as Valencia, Santander, Coruña, Oviedo and Vigo, amongst others.

“We want to create a portfolio of prime assets – we are not looking for properties to create value, but rather buildings are profitable with operators such as H&M, Mango and chains from the Inditex group as tenants”, explains Julienne, who also added that the stores that may interest the fund should have a surface area of around 1,000 m2.

“It is a safe fund, which has been created with an investment capacity of €100 million, but which may reach €300 million over the next few years”, he says. The type of investor to which this new vehicle from IBA Capital will be directed are “conservative and Spanish”, explains the director. “Family offices, for example, are target investors of this new fund”, he concludes. (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Medcap Diversifies & Allocates €50M to Alternative Investments & Portugal

19 March 2018 – Eje Prime

Medcap is starting 2018 by making new investments and entering new markets. Diversification and alternative assets are going to be the focus of the group over the coming months, which has just invested €50 million on its entry into Portugal and the launch of a healthcare assets investment division, according to explanations provided by Dimas de Andres, the group’s CEO to Eje Prime.

One of the main operations that Medcap is going to carry out this year, as well as continuing “to keep an eye on opportunities in the prime retail sector, which is one of the fund’s main activities” is going to be the launch of two out-of-town retail parks in the Portuguese market, specifically, in Lisbon and Porto.

The company has invested €30 million in the purchase of 2 plots of land, one spanning 19,000 m2 and the other measuring 27,000 m2, for the complete development of two commercial areas, which are going to be leased in their majority to a supermarket group, according to explanations from Medcap.

Medcap Real Estate, a company owned by the De Andrés Puyol family, has also explained that it is going to back alternative investments this year. The company is currently involved in a healthcare project in the Community of Valencia. With an investment of between €15 million and €20 million, Medcap is going to construct the building with all of the needs that a healthcare operator may have, in order to put it on the market and lease it or resell it.

With these types of assets, the company is going to focus its efforts on Valencia and Cataluña. “We are not afraid to continue buying in Spain: our investments in Madrid and Barcelona are still intact”, explains the CEO of the company. “We are long-termists and we are not afraid of the political situation”, he says.

In addition to its investments, the group is also starting a divestment phase in 2018. The company has already sold the NH Murcia Hotel, located in Cartagena, and a supermarket, also located in Cartagena, for €12.5 million. “At the end of the day, divestment forms part of our business too”, say sources at the company.

MedCap, ten prime assets

At the beginning of 2015, the De Andrés Puyol family constituted Medcap Real Estate to manage its portfolio of assets, formed as a result of the contribution by Inversora del Reino de Valencia of one of its branches of activity, which included all of the urban assets leased or offered as rental properties, as well as all of the shares of the subsidiary specialising in managing operations relating to prime retail.

Medcap’s shareholders have a long history in the real estate business, with extensive experience in the search for, development of and letting of assets. Medcap focuses its activity mainly on the prime segment given the greater stability of that sector. Nevertheless, it also has a portfolio of rental properties for operation such as supermarkets in more secondary areas.

Medcap has a pipeline of assets in different stages of development or study in Spain, the Netherlands and Italy. Its most noteworthy properties include the building at number 80 Paseo de Gracia, where the luxury firm Louis Vuitton has its flagship store in the Catalan capital, as well as the Desigual megastore on Plaza Cataluña and the Apple store on Paseo de Gracia, according to the firm’s annual accounts.

In Madrid, until January, the group was the owner of the Adidas flagship store at number 21 Gran Vía (pictured above), which it sold to Triuvua; and the Louis Vuitton flagship store at number 66 Calle Serrano in Madrid, amongst others. The valuation of Medcap’s prime retail assets exceeds €475 million, according to the most recent valuation performed by the company.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Savills Aguirre Newman: Inv’t in Logistics Assets Exceeded €1.5bn in 2017

15 February 2018 – Expansión

Real estate investment in logistics assets exceeded €1.5 billion in 2017, up by 86% compared to the previous year. That figure includes the corporate operation involving Logicor.

The boom in e-commerce, combined with their attractive returns, have placed logistics assets in the spotlight for real estate investors. In this way, last year, the purchase of these types of properties reached a record-breaking €1.5 billion, according to the consultancy firm Savills Aguirre Newman.

That disbursement represents an increase of 86% compared to the previous year and is the highest figure ever recorded for these types of properties in the Spanish market. Nevertheless, the amount does include the corporate operation carried out by Blackstone. The US fund divested its logistics subsidiary, owner of 147 million m2 of space across 17 countries (including in Spain) to China Investment for €12.25 billion.

In the last three months of the year alone, investment in these types of assets exceeded €200 million.

Unlike other types of properties, such as offices, interest in these assets extends beyond Madrid and Barcelona. “The consolidation of economic growth and the gradual improvement in the fundamentals of the logistics market (demand, availability and rental prices) has continued to drive investment in the sector, which, due to the shortage of supply in Madrid and Barcelona, has shifted its interest to secondary markets, such as Zaragoza and Valencia”, say sources at the consultancy firm.

The large operations of the year included P3’s purchase of GreenOak’s portfolio for €243 million.

In fact, the high degree of interest has caused many investors to back the purchase of plots of logistics land for their subsequent development. “Operations involving logistics land, for the development of turnkey and at-risk projects, have become one of the cornerstones of the market. The high demand for space, combined with the shortage of finished products suitable for the requirements of specific demand, is generating a lot of interest in this product”, explain sources at Savills Aguirre Newman.

The boom in operations has already had an impact on the returns offered by these types of properties. “The initial rate of return for the most prime assets was below 6%, but during the course of the year, for some specific operations, the rate amounted to 5.5%, which means that the gentle upwards trend already observed in previous years is being maintained”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Flagship Stores Become The Bastion Of Large Retailers

19 October 2017 – Expansión

The unstoppable rise of e-commerce, the tsunami of digitalisation and the new buying habits of consumers have revolutionised the retail sector forcing operators to adapt to the new times to stay competitive.

The e-commerce sector is now turning over €24,000 million per annum in Spain, with a growth rate of 20% p.a. In this context, consumers are increasingly using the internet to manage their purchases, resolve queries and optimise their visits to stores. As such, they are visiting stores less frequently but they are spending more time there when they do go, according to a report from CBRE about the retail sector.

In this context, large international brands are backing the flagship store model as a gateway into Spain; and operators that have traditionally based themselves on the outskirts of cities are now moving into flagship stores in the centre. By way of example, the French firm Kiabi opened a store on Paseo de Gràcia a few months ago. In the same way, operators who have traditionally had stores in retail parks are now making space for themselves in the city centre, such as Media Markt, which opened two stores in the centre of Barcelona in 2016. Before the summer, the electronics firm also opened its new its flagship store in Plaza del Carmen, Madrid, just a stone’s throw from Gran Vía.

Ikea is joining this trend too, with a store on Calle Serrano; as is Leroy Merlin, which is planning to open a shop on Calle Fontanella, next to Plaza de Catalunya in Barcelona

Interest in Spain

“Physical stores are still the favourite channel for consumers, but it is harder to get people out of the house. To attract them, retailers are opening large flagship stores focused on the shopping experience and expanding the range of services, supported by new technologies that allow marketing strategies to be customised”, explains Gonzalo Senra, National Director of Retail at CBRE España (…).

Given the interest from large brands in Spain and encouraged by the upwards cycle of the economy and the improvement in consumption, many overseas institutional investors have decided to back the Spanish market. For example, the US investor Hines has purchased four important prime premises in Madrid and Barcelona in the last year.

These types of investors are the main buyers of flagship stores in well-located premises, involving investment volumes of more than €20 million. Moreover, sources at the consultancy firm have noted a change in the trend in this market with the entry of several insurance companies bidding for large prime assets.

By contrast, the market for smaller acquisitions is dominated by Spanish private investors and family offices – they tend to be particularly interested in assets worth less than €10 million.

Overall, investment in high street premises amounted to €800 million in 2016. The rate of investment continued during the first half of this year, with an investment volume of €515 million, according to data from the consultancy firm (…).

The high level of demand has accentuated the typical shortage of well-positioned products and resulted in a reduction in returns. According to the report, the downward trend in yields continued in 2017 to reach 3.25% in some cases for the most prime products in Madrid and Barcelona (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Aguirre Newman: Inv’t In Logistics Sector Amounted To €230M In Q1

10 May 2017 – Aguirre Newman

According to the Q1 Logistics Market Monitor Report for Madrid and Barcelona compiled by Aguirre Newman, the volume of investment in the logistics market amounted to €230 million during the first quarter of 2017, compared with €135 million in the same period in 2016, which represents an increase of 70.4%.

The leasing of logistics space in Madrid and Barcelona amounted to 251,866 m2, involving 29 operations, with a maximum rent of €6/m2/month during the quarter.

Madrid 

In Madrid, demand for logistics space exceeded 127,703 m2, which meant that the amount contracted in Q1 2017 represented 31.5% of the total amount leased in 2016.

The higher volume of activity was also reflected in the number of operations, which was 56% higher than in Q1 2016 (9 operations vs. 16). Of the 16 operations closed in Q1 2017, three accounted for 57% of the total space leased, with a surface area of more than 10,000 m2 each.

With respect to rental income, the maximum rent was €6/m2/month, in an operation in the CTM in Madrid. Besides that one-off operation, rents in the prime area remained in the region of €5/m2/month to €5.5/m2/month.

According to the report from Aguirre Newman, regarding the investment market, there is still a considerable amount of interest in the logistics market, with operations closed in the main logistics markets (Madrid and Cataluña) as well as in other secondary markets, such as Pamplona, during the quarter. In terms of yields, they amount to just under 6% for certain prime assets.

Barcelona 

Meanwhile, in Barcelona, the leasing of logistics space during the first quarter exceeded 124,163 m2, which represented an increase of 40% compared to the same period in 2016. The number of operations closed during the period rose to 13, of which three stood out for involving spaces larger than 10,000 m2 and for together accounting for 68% of the total space leased.

Aguirre Newman’s report highlights that the logistics investment market in Barcelona and its area of influence is still very attractive for investors.

Original story: Aguirre Newman

Translation: Carmel Drake

Madrid & Barcelona Renew Their Main Thoroughfares

5 September 2016 – Expansión

Total investment of €900 million / Investment in retail assets at street level doubled to reach record levels in 2015. Pontegadea’s purchase of the building located on Gran Vía, 32 for €400 million accounted for 40% of total investment. Spain is still in the Top 10 target markets for large fashion operators.

The busiest, most touristic and sought-after streets in Madrid and Barcelona, such as Gran Vía and Las Ramblas, have always been an object of desire for the major players in the restaurant and leisure sector; and, for several years now, they have also been attracting the attention of the major fashion chains, which are choosing to showcase their flagship stores on these avenues.

The high footfall rates on these central streets make them the perfect target for housing the flagship stores of major fashion and accessories brands and, in exchange, these historical avenues have renewed their offer and rejuvenated their image.

In parallel, and in line with the rise of the flagship stores, the retail sector has experienced a general increase in the sale and purchase of large premises. Specifically, more than twenty new international brands arrived in Spain in 2015, of which 60% chose Madrid to open their first store and 32% opted for Barcelona, according to a report prepared by CBRE. As such, in 2016, Spain continues to rank in the top ten target markets for major international companies.

The next major brand expected to arrive in Spain is the Japanese fashion chain Uniqlo. It will begin by opening a flagship store in Barcelona, however, the Asian group is also looking for premises in Madrid. Other firms that have expressed an interest in entering the Spanish market include the Italian brands Terranova and OVS.

Overall, investment in the high street (retail assets at street level) broke records last year, with €900 million invested, twice as much as in the previous year, largely fuelled by Pontegadea’s purchase of the building that Primark now occupies on Gran Vía, 32, for €400 million. That operation alone accounted for 40% of total investment.

In Barcelona, the lack of available supply meant that investment in the high street was not as intense and sales mainly involved mix-used buildings, with a retail component, such as Diagonal 490 and the historical Torre Muñoz, in Fontanella.

The strong demand and shortage of availability in terms of prime supply have caused yields to decrease, to around 3.5% for the best products, in both Madrid and Barcelona. Nevertheless, according to CBRE, that figure is above those reported in other European cities such as London and Paris.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Axiare’s Portfolio Appreciates By 15% To €859M In 2015

3 February 2016 – Expansión

Axiare Patrimonio’s portfolio of real estate assets is worth €858.8 million, which represents an increase of 15.3% compared to the purchase price of the assets contained therein, according to a report submitted by the Socimi yesterday (Tuesday) to Spain’s National Securities Market Commission (CNMV).

The valuation has been performed by the independent consultancy firm CBRE Valuation Advisory, in accordance with the RICS (Royal Institution of Chartered Surveyors) guidelines, as at 31 December 2015.

The firm attributes this “significant” increase in the value of its assets to: the investor appetite that has evolved during 2015; the increase in rents in the market in general; the composition of its portfolio, which allows it to benefit from this trend in rents; and the professionalisation of the active management of its team, which has included the remodelling of some of its buildings.

According to the Socimi, the improvement in the Spanish economy has resulted in an increase in demand for offices and logistics assets, especially for Class A products in established areas of Madrid and Barcelona, which in turn has produced, an upwards trend in rents for prime buildings.

“CBRE’s valuation confirms that our strategy of value creation is sustainable for our shareholders, and so we will continue working in the same vein”, said the CEO of Axiare Patrimonio, Luis López de Herrera-Oria. “We are now starting work on the remodelling of several buildings, the fruits of which will be seen during the course of 2016”, he added.

Axiare Patrimonio’s current portfolio, which includes its recent acquisition of an office building in Madrid, comprises 29 buildings with a total leasable surface area of 558,000 m2. By asset type, the portfolio contains offices (73%), logistics platforms (15%) and other commercial assets (12%).

As at the valuation date, the assets in the office segment had increased in value by 13.1% compared with their purchase value, with those buildings located in the CBD of Madrid – 38% of the portfolio – experiencing the greatest increase in value, up by more than 15%.

In terms of Axiare Patrimonio’s other strategic segment, logistics, those assets increased in value by almost 23% and the rest of the portfolio increased in value by 19.7%.

In similar comparative terms (i.e. like-for-like), the 16 assets that were in the portfolio as at 31 December 2014 had increased in value by 11.8% as at 31 December 2015.

By segment, the company’s like-for-like office portfolio increased in value by 11.3% during 2015; the like-for-like logistics segment of the portfolio increased by 15% and the rest of the portfolio, which comprises other commercial assets, increased by 7.4% in one year.

Original story: Expansión

Translation: Carmel Drake